State panel urges higher driver fees for roads

New charges would cost up to $200 a year

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HARRISBURG -- A commission appointed by Gov. Tom Corbett will recommend a variety of increases in motor vehicle fees to generate an additional $2.5 billion a year for roads, bridges and public transit.

The increases would cost a typical driver $120 to $200 a year if they are fully phased in over a five-year period, according to figures released Monday by the Governor's Transportation Funding Advisory Commission.

The commission will recommend that vehicle registration and driver's license fees be adjusted for inflation that has occurred since they last were raised. The annual registration fee, last increased in 1997, would go from the current $36 to about $49.

Mr. Corbett appointed the panel of 40 volunteers from all sectors of the transportation industry to address an estimated $3.5 billion annual shortfall in funding needed to maintain the state's infrastructure and transit systems. The panel's goal was to find $2.5 billion in recurring revenue by the final year of a five-year period, according to its chairman, state Transportation Secretary Barry Schoch.

The panel by Aug. 1 will deliver a list of options to the governor, most of which would require legislative approval.

The report will chart a "Decade of Investment" to show the public in detail what it will get in return for the higher fees, and it also will project what would happen to the state's transportation system if nothing is done, Mr. Schoch said.

The biggest component is lifting a cap on the Oil Company Franchise Tax, which is levied on the wholesale price of gasoline. Now, the tax is applied only to a maximum of $1.25 per gallon. Removing the cap would eventually generate more than $1 billion in new revenue. The commission projected that a typical driver with one car getting average gas mileage and driving 12,000 miles a year would pay $101 more a year for gasoline with the limit on the tax removed.

Adjusting the various motor vehicle fees for past inflation and indexing them to grow with future inflation would generate $574 million by the fifth year and cost the typical driver $14 to $21 a year, the commission said.

Another idea the commission might recommend is an annual fee based on a vehicle's value, which would decrease over time as the vehicle gets older. The estimated cost to a typical driver would be $86 a year by the fifth year of the plan. But some commission members were wary, as similar fees in other states have been controversial.

"There's been a pretty serious backlash in other states," said Bradley Mallory, president of Michael Baker Corp. and a former PennDOT secretary. "It makes me nervous."

Another proposal would tack $25 in fines onto traffic violations that did not put points on the driver's license and $100 to offenses that did result in points. Drivers who let their insurance lapse could pay a $500 fine to avoid the automatic three-month driver's license suspension.

The panel also wants to shift some or all of the $570 million annual cost of the state police, currently paid for with transportation dollars, to the state's general fund. As part of that, it will recommend that municipalities that rely on the state to provide police protection be charged for the expense.

Panelists said it was crucial to spread the burden for needed increases in transportation spending. "None of these [proposals] are going to be perfect equity issues. There's going to be some rough justice," said Ronald Marino, managing director of Citigroup Infrastructure. "The only way you can debate this politically is if everyone's ox is gored just a little."

In all, the commission's proposal would raise $1.8 billion in new revenue by the fifth year for state highway and bridge programs, $300 million to $400 million for local governments and $300 million to $400 million for public transit.

The maximum cost to the average driver works out to about $3.80 per week, Mr. Schoch said.

Transit agencies like the Port Authority would have to find local funding equaling 15 percent of any new state funding to qualify for it -- the same percentage match that the state currently requires. They also would have to agree with findings of a forthcoming study on whether they could save money by merging with other regional transit agencies, or pay the state for the lost savings if they don't agree to merge, Mr. Schoch said.

The commission's final report, in addition to the various funding options, will recommend a comprehensive study of the state's freight delivery network including rail systems, ports and trucking; a study of transitioning from gasoline taxes to an "energy neutral" fee, possibly based on miles traveled; enactment of state legislation authorizing public-private partnerships; and giving local governments broad authority to impose their own taxes, tolls or fees to raise money for transportation improvements.

Mr. Schoch said he hoped the Legislature would tackle the transportation funding issue this fall. With next year an election year for lawmakers, "it's got to happen in September or October or it won't happen," he said.